GES TWO-DECADE TRANSFORMATION:

JACK WELCHS LEADERSHIP

CONTENT
ALL ABOUT JACK WELCH TWOS ANALYSIS

GE OVERVIEW

INITIATIVES TAKEN BY JACK WELCH

GES VISION FOR 2013 & BEYOND

OVERVIEW
FOUNDED
1878, Thomson Houston Electric Company (THEC)

1 2
3 4

MERGER
1892, Between GE and THEC formed General Electric

HEADQUARTERS
Fairfield, Connecticut, U.S

REVENUE
$ 147.300 Billion (as of 2012)

imagination at work

OVERVIEW

ACHIEVEMENTS (2012-13)
3rd Largest Company in the world (Forbes)

5th Best Global Brand (Interbrand)

6th Largest in USA (Gross Revenue) 7th Best company for Leaders (Fortune) 14th Most profitable company in the world (Fortune) 15th Most admired company (Fortune) 19th Most Innovative company (Fast Company)

GE CEOs

SINCE 1973

PREDECESSOR

REG JONES (1973 - 1980)

43 strategic units: To support strategic planning. Unable to review and approve massive volumes of Information generated by 43 SBUs.

Countrys leading business statesman.

GE was benchmark for others companies (Imitated its SBU based structure & planning process).

Formed a covering on GEs departments, divisions, groups and SBUs with SECTORS.

YEAR 1970 1979

ACHIEVEMENTS CEO of the Year 3 times by his peers. CEO of the Decade

1981

Management Legend by WSJ

JACK WELCH

BRIEF INTRODUCTION

John Francis "Jack" Welch, Jr.

(born November 19, 1935), Peabody, MA

ALMA- MATER
Salem High school University of Massachusetts (Bachelor of Science in Chemical Engineering, 1957) University of Illinois at UrbanaChampaign (M.S and PhD, 1960)

YEAR 1997 1999 2001-2004

ACHIEVEMENTS National business hall of fame Manager of the 20th century Forbes 400 richest Americans

JACK WELCH
ECONOMY IN RECESSION

CHALLENGES AS A CEO
HIGH INTEREST RATES

3 1

2
HIGHEST UNEMPLOYMENT RATES SINCE DEPRESSION

INITIATIVES

WELCHS EARLY PRIORITIES

HARDWARE INITIATIVE
#1 or #2 - Fix, Sell or Close o Three Circle Concept o De-Staffing & Real Time Planning

SOFTWARE INITIATIVE
o Work Out o Best Practices

INITIATIVES

THREE CIRCLE CONCEPT

SERVICES
GECC Information Construction & Engineering Nuclear Services

SUPPORT
Ladd Petroleum Semiconductor

CORE
TECHNOLOGY
Industrial Electronics Medical Systems Lighting Major Appliance Motor

OUTSIDE
Housewares Central Air-Conditioning

GE Trading Co.
Utah Mining

TV & Audio Cable Mobile Power Delivery

Radio Stations

Materials
Aerospace Aircraft Engines

Transportation
Turbine Construction Equipment

VENTURES
Calma

INITIATIVES

DISCIPLINED DESTAFFING

We dont need the questioners & checkers, the

nit-pickers who bog down the process..

Today each staff has to ask, How do I add value? How do I make people on the line more effective and competitive?.

LEAN & AGILE:

Making people productive and competitive

INITIATIVES

REAL TIME PLANNING

FIVE PAGE STRATEGY PLAY BOOK ONE PAGE ANSWERS TO 5 QUESTIONS: 1. Current Market Dynamics 2. Competitors Key Recent Activities

3. The GE Business Response

4. Greatest competitive threat over next 3 years 5. GEs Businesss Planned Response

INITIATIVES
Number of Employees (1981-89) Revenue (1981-85)

BENEFITS OF HARDWARE INITIATIVE

404,000 to 292,000

$27.2 Billion to $29.2 Billion $1.6 Billion to $2.4 Billion

Operating Profits (1981-85)

WORK OUT

THE FIRST SOFTWARE INITIATIVE

OVERVIEW An open discussion forum OBJECTIVE To design a process to get unnecessary bureaucratic work out of the system. To create the culture of a small company, where all felt engaged and everyone had voice. IMPLEMENTATION Implementation Team (24 consultants)

Employee could give ideas and suggestions on

business and get immediate responses to it.

Group of 40-100 employees

3 day sessions On the spot decision on 80% proposals.

BEST PRACTICES

THE SECOND SOFTWARE INITIATIVE

RESULT

FOCUS MORE ON HOW THINGS GET DONE

LEARNING FROM OTHER INDUSTRIES

Productivity Increase

Managers realized the key focus areas of business

IMPLEMENT ATION

GO GLOBAL
Taking advantage of global economic slow down
European Crisis- $17.5Bn Mexican Peso collapse Asian Economy Crisis (1997-98)

Appointing Paolo Fresco as Head, International Operations

Rampant Acquisitions

EMPLOYEES

DEVELOPING LEADERS FOR TOMORROW

Keeping close tabs on top 3000 Executives Succession Planning

Improved Packages/Stock Options Training institute at Croton Ville

360 Degree Feedback A Players (Characterized by 4Es Energy, Energize, Edge, Execution)

EMPLOYEES
RANK 1 2

PERFORMANCE APPRAISAL SYSTEM

RATING Top 10% 15% TOP STRONG REWARD Stock Options Stock Options

3 4
5

50% 15%
Bottom 10%

HIGHLY VALUED BORDERLINE

LEAST EFFECTIVE

Training Improve or Move

Weed Out

INTO THE 1990s

THE THIRD WAVE

Service Businesses

Notion of Stretch

Boundary less Behavior

SIX SIGMA

QUALITY INITIATIVE
Employees were dissatisfied with the quality of its product.

GE was operating at error rates 10,000 times the six sigma quality level of 3.4 defects/million costing $812 billion/year.

Series of planning, resource allocation, review, and communication meetings were done.

Participation in initiative was compulsory, 40% Bonus was tied with it.

SIX SIGMA

IMPLEMENTATION
GREEN BELT BLACK BELT
MASTER BLACK BELT

Training 4 weeks Implementation- 5 Months project aimed at improving Quality.

Training- 6 weeks in statistics, data analysis and other six sigma tools.

Full time Six Sigma instructors.

RESULTS

10 Fold increase in life of CT scan X-ray tubes. 62% reduction in time at service stations. 30,000 Six Sigma projects were initiated a year.

SUMMARY
CULTURAL CHANGE
going for the leap

PRODUCTIVITY

Restructuring

Downsizing

Removing Bureaucracy

Changing Attitude

COMPARISON
JACK WELCH

Promoted internal communication

Focus on performance & strictly quantifiable results mostly promoting from within Focused on production demanding and intimidating

External communication (Investors & Third Parties)

Allowed employees to come up with innovative ideas Brought a number of outsiders into Organization Focused on marketing Made GE more environmentally conscious

JEFF EMMELT

Friendlier and more approachable

TOWS ANALYSIS
Competition Information security Financial crisis Media depictions Evaluation and Analysis Mergers and acquisitions

Research and development

T
TOWS ANALYSIS

O
Global recognition

Under-performing energy sector Threat to flexibility

Global strength and competitiveness

Excellent Management Diversified lines of operation Environmental initiatives

2012

PERFORMANCE
CONSOLIDATED REVENUES (In $ Billions)
180 154 150 147 147 12.4 9.9 16.9

OPERATING EARNINGS (In $ Billions)

14.9 16.1

2008

2009

2010

2011

2012

2008

2009

2010

2011

2012

Total Industry Segment Revenue + GE Capital Revenue (45%) Change in portfolio Sale of 49% stake of NBCU

Rising profit from selling Air craft engines and transportation equipments Acquisition of Lufkin Industries Rise in orders from aviation and oil

STRATEGIES
01

GES VISION FOR 2013 & BEYOND

Margin Expansion Growth from Emerging Economies Product and Service launches Energy, Healthcare and Aviation to drive growth

02 03 04

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